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Meaning / Definition of
Reverse Hedge
Categories: Stocks, Investing and Trading,
A hedging strategy in which an investor sells short a convertible security on an underlying security already owned. This means that the underlying security is held long and the convertible is sold short, which is the opposite of a normal hedge. The investor profits when the underlying security loses value, which reduces the premium on the convertible security. A reverse hedge is a type of convertible arbitrage. also called chinese hedge.
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